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Future-oriented Financial Statements of Fisheries and Oceans Canada

For the years ending March 31, 2011 and March 31, 2012

Department of Fisheries and Oceans
Management Responsibility for Future-Oriented Financial Statements

Departmental management is responsible for these future-oriented financial statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at December 31, 2010 and reflect the plans described in the Report on Plans and Priorities.


Roch Huppé, Chief Financial Officer
Ottawa, Canada
March 15, 2011
Claire Dansereau, Deputy Minister
Ottawa, Canada
March 15, 2011



Future-oriented Statement of Financial Position (unaudited)

At March 31

(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Assets
Financial Assets
Due from Consolidated Revenue Fund 310,977 339,789
Accounts receivable and advances (Note 6) 20,937 20,610
Total financial assets 331,914 360,399
Non-Financial Assets
Inventory (Note 7) 37,685 37,685
Tangible capital assets (Note 8) 2, 576,982 2,555,717
Total non-financial assets 2,614,667 2,593,402
  2,946,581 2,953,801
Liabilities
Accounts payable and accrued liabilities (Note 9) 311,393 340,205
Vacation pay and compensatory leave 78,043 75,997
Lease obligation for tangible capital assets (Note 10) 58
Other liabilities (Note 11) 22,528 24,609
Employee future benefits (Note 12) 171,318 164,276
Environmental and contingent liabilities (Note 13) 71,298 70,201
Total liabilities 654,580 675,346
Equity of Canada (Note 14) 2,292,001 2,278,455
  2,946,581 2,953,801
Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.
Contingent liabilities (Note 13)
Contractual obligations (Note 15)
The accompanying notes form an integral part of these future-oriented financial statements.

Future-oriented Statement of Operations (unaudited)

For the Year Ended March 31

(in thousands of dollars)
  Forecast
2012
Estimated
Results
2011
Expenses
Economically Prosperous Maritime Sectors and Fisheries 569,471 592,880
Sustainable Aquatic Ecosystems 325,442 348,532
Safe and Secure Waters 746,716 772,047
Internal Services 328,537 369,776
Total Expenses 1,970,166 2,083,235
Revenues
Economically Prosperous Maritime Sectors and Fisheries 52,920 55,725
Safe and Secure Waters 38,908 33,531
Total Revenues 91,828 89,256
Net Cost of Operations 1,878,338 1,993,979
Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.
Segmented information (Note 17)
The accompanying notes form an integral part of these future-oriented financial statements.



Future-oriented Statement of Equity of Canada (unaudited)

For the Year Ended March 31

(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Equity of Canada, beginning of year 2,278,455 2,136,626
Net cost of operations (1,878,338) (1,993,979)
Net cash provided by Government 1,801,800 1,972,979
Change in due from the Consolidated Revenue Fund (28,812) 48,046
Services provided without charge by other government departments (Note 16) 118,896 114,783
Equity of Canada, end of year 2,292,001 2,278,455
Information for the year ended March 31, 2011 includes from amounts from April 1, 2010 to December, 31 2010.
The accompanying notes form an integral part of these future-oriented financial statements.



Future-oriented Statement of Cash Flow (unaudited)

For the Year Ended March 31

(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Operating activities
Net cost of operations 1,878,338 1,993,979
Non-cash Items
Amortization of tangible capital assets (Note 8) (196,714) (181,851)
Net loss on write-offs, write-downs and disposal of tangible capital assets (15,495) (20,568)
Services provided without charge by other government departments (Note 16) (118,896) (114,783)
Variations in Statement of Financial Position
Increase in accounts receivable and advances 327 1,330
Decrease in inventory (1,600)
Decrease (Increase) in accounts payable and accrued liabilities 28,812 (47,668)
Increase in vacation pay and compensatory leave (2,046) (1,956)
Decrease in other liabilities 2,081 5,923
Increase in employee future benefits (7,042) (6,752)
(Increase) Decrease in environmental liabilities (1,097) 3,175
Increase in contingent liabilities (200)
Cash used by operating activities 1,568,268 1,629,029
Capital Investment Activities
Acquisitions of tangible capital assets (Note 8) 238,608 345,014
Principal obligation of tangible capital lease (Note 10) 58 76
Proceeds from the disposal of tangible capital assets (5,134) (1,140)
Cash used by investing activities 233,532 343,950
Net cash provided by Government of Canada 1,801,800 1,972,979
Information for the year ended March 31, 2011 includes actual amounts from April 1, 2010 to December 31, 2010.
The accompanying notes form an integral part of these future-oriented financial statements.






1. Authority and purpose

The Department of Fisheries and Oceans (DFO) was established under the Department of Fisheries and Oceans Act. The DFO reports to Parliament through the Minister of Fisheries and Oceans.

The mandate of the DFO, on behalf of the Government of Canada, is to be responsible for developing and implementing policies and programs in support of Canada's economic, social, ecological and scientific interests in oceans and fresh waters.

The DFO's guiding legislation includes the Oceans Act and the Fisheries Act. The DFO is also one of the three departments responsible for the Species at Risk Act.

The DFO's three strategic outcomes are delivered through twenty-eight program activities. The three outcomes are described below. Internal Services are activities and resources that are administered to support the needs of programs and other corporate obligations of an organization.

Economically Prosperous Maritime Sectors and Fisheries: Through its policies, programs and services, and while supporting the sustainable and effective use of Canada's water resources, the DFO contributes to the capacity of Canada's Maritime Sectors and Fisheries to derive economic benefits and further enhance their competitiveness.

Sustainable Aquatic Ecosystems: The DFO's programs and policies contribute to the conservation, protection, and sustainability of Canada's aquatic ecosystems through the management of risks that affect species, oceans and fish habitats.

Safe and Secure Waters: The DFO contributes to maintaining and improving maritime safety and security through the provision of maritime infrastructure, information, products and services necessary to ensure safe navigation and the protection of life and property.

Internal Services: Support activities that meet the needs of programs and other corporate obligations: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.


2. Significant Assumptions

The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the department as described in the Report on Plans and Priorities.

The main assumptions are as follows:

  1. The department's activities will remain substantially the same as for 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. Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.
  4. Estimated year end information for 2010-11 is used as the opening position for the 2011-12 forecasts.

These assumptions are adopted as at December 31, 2010.


3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to accurately forecast final results for the remainder of 2010-11 and for 2011-12, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these financial statements the DFO has made estimates and assumptions concerning the future. These estimates and judgements may differ from the subsequent actual results. Estimates and judgements 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 financial statements and the historical financial statements include:

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  2. Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.
  3. Interest rates in effect at the time of issue will affect the net present value of non-interest bearing loans.
  4. 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 DFO 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.

4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with Treasury Board accounting policies, which are consistent with Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

  1. Parliamentary authorities - the Department is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the department do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

  2. Net Cash Provided by Government: The DFO operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Department is deposited to the CRF and all cash disbursements made by the Department are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

  3. Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Department is entitled to draw from the CRF without further appropriations to discharge its liabilities.

  4. Revenues – are presented on an accrual basis:
    • 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 occurred that gave rise to the revenues.

    • 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.

    • Funds that have been received but not earned are recorded as deferred revenue, provided the department has an obligation to other parties for the provision of goods, services or the use of assets in the future.

  5. Expenses – are presented on an accrual basis:
    • Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized 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.

    • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made.

    • Vacation pay and compensatory leave are expensed in the year that the entitlement occurs in accordance with the terms and conditions of employment.

    • Services provided without charge by other government departments for accommodation, the employer's contribution to the health and dental insurance plans, administration costs and commissions paid to provincial workers' compensation boards and legal services are recorded as operating expenses at their estimated cost.

  6. Employee future benefits
    • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government of Canada. The DFO's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the DFO to make contributions for any actuarial deficiencies of the Plan.

    • Severance benefits: Employees are entitled to severance benefits, as provided for under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

  7. Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

  8. Contingent liabilities: Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, and the case is considered material, the contingency is disclosed in note 13(b) to these future-oriented financial statements.

  9. Environmental liabilities: Environmental liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the DFO becomes aware of the contamination and is obligated, or is likely to be obligated to incur such costs. If the likelihood of the DFO's obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in note 13(a) to these future-oriented financial statements.

  10. Inventory: Inventory consists of parts, material and supplies held for future program delivery. It is valued at cost. If there is no longer any service potential, the inventory is valued at the lower of cost or net realizable value.

  11. Tangible capital assets: All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The DFO does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves or museum collections.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Asset Class Amortization Period
Buildings 10-40 years
Work and infrastructure 5-75 years
Machinery and equipment 3-25 years
Informatics 3-5 years
Other equipment, including furniture 5-10 years
Ships and boats 5-40 years
Aircrafts 15-25 years
Vehicles 5-20 years
Leasehold improvements *
Assets under capital leases **
* The lesser of the economic life of the improvement or the lease term
** Over the period of expected use, i.e., the economic life or lease term

Work in progress are recorded in the applicable asset class in the year that they become available for use and are not amortized until they become available for use.


5. Parliamentary Authorities

The DFO receives most of its funding through annual Parliamentary authorities. Items recognized in the statement of operations and the statement of financial position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, the DFO has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

5(a) Reconciliation of net cost of operations to requested authorities


(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Net cost of operations 1,878,338 1,993,979
Adjustments for items affecting net cost of operations but not affecting authorities  
Revenue not available for spending 45,633 49,914
Amortization of tangible capital assets (196,714) (181,851)
Net loss on write-offs, write-downs and disposal of tangible capital assets (15,495) (20,568)
Services provided without charge by other government departments (118,896) (114,783)
Decrease in inventory (1,600)
Increase in vacation pay and compensatory leave (2,046) (1,956)
(Increase) Decrease in environmental liabilities (1,097) 3,175
Increase in employee future benefits (7,042) (6,752)
Other 1,338 (659)
Total adjustments for items not affecting authorities (294,319) (275,080)
Adjustments for items not affecting net cost of operations but affecting authorities  
Acquisitions of tangible capital assets 238,608 345,014
Principal obligation of tangible capital lease 58 76
Total adjustments for items affecting appropriations 238,666 345,090
Forecast authorities available 1,822,685 2,063,989

5(b) Authorities requested


(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Authorities requested
Vote 1 – Operating expenditures 1,229,128 1,346,068
Vote 5 – Capital expenditures 328,062 456,356
Vote 10 – Grants and contributions 127,653 133,555
Statutory amounts 137,842 127,830
Forecast authorities available 1,822,685 2,063,989

Forecast authorities requested for the year ending March 31, 2012 are the forecasted spending amounts available at the time that the Future-oriented financial statements were prepared. Estimated authorities requested for the year ending March 31, 2011 include amounts presented in the 2010-2011 Main Estimates and Supplementary Estimates.


6. Accounts receivable and advances

The following table presents details of accounts receivable and advances.

(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Receivables
Receivables from external parties 10,826 35,310
Receivables from other federal government departments and agencies 11,940 11,940
Accrued interest on loans 1,556 1,556
Refunds of program expenses 189 189
Less:
Allowance for doubtful accounts on external receivables (3,825) (28,624)
Total receivables 20,686 20,371
Loans and advances
Accountable advances 251 239
Loans (1) 1,472
Allowance on loans and advances (1,472)
Total loans and advances 251 239
Total accounts receivable and advances 20,937 20,610

(1) Loans of $1.4 million have been made to haddock fishermen ($1.3 million, interest of 8% per annum, repayable over 4 years until 1979) and to Canadian producers of frozen groundfish ($0.1 million, interest of 13 % per annum, repayable over 7 years until 1987).


7. Inventory


(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Inventory held for future program delivery 36,684 36,684
Inventory for resale 1,001 1,001
Total inventory 37,685 37,685


8. Tangible capital assets


(in thousands of dollars)
  Cost
Opening balance
April 1, 2011
Acquisitions Disposals/ write-offs Work In Progress Transfers Closing balance
March 31, 2012
Land 20,903 198 101 128 21,128
Buildings 547,084 269 1,206 27,955 574,102
Works and infrastructure 2,101,902 189 10,353 93,145 2,184,883
Machinery and equipment 390,869 7,008 13,446 11,485 395,916
Informatics 80,245 1,171 7,260 5,380 79,536
Other equipment, including furniture 700 8 27 681
Ships and boats 1,712,420 1,039 13,085 38,715 1,739,089
Aircrafts 39,983 984 1,216 40,215
Vehicles 80,458 9,842 6,840 152 83,612
Leasehold improvements 564,209 99 2,803 7,811 569,316
Work in progress 601,058 218,785 17,631 (185,987) 616,225
Assets under capital lease 525 525
Total 6,140,356 238,608 73,736 6,305,228

(in thousands of dollars)
  Accumulated Amortization Net Book Value
Opening Balance
April 1,
2011
Amortization Disposals/ write-offs Closing Balance
March 31, 2012
March 31, 2012 March 31, 2011
Land 21,128 20,903
Buildings 364,612 22,892 789 386,715 187,387 182,472
Works and infrastructure 1,144,628 70,565 8,108 1,207,085 977,798 957,274
Machinery and equipment 283,735 17,341 13,962 287,114 108,802 107,134
Informatics 72,529 7,723 8,164 72,088 7,448 7,716
Other equipment, including furniture 655 12 27 640 41 45
Ships and boats 1,253,649 48,720 13,137 1,289,232 449,857 458,771
Aircrafts 34,003 1,342 1,138 34,207 6,008 5,980
Vehicles 49,703 6,898 6,159 50,442 33,170 30,755
Leasehold improvements 380,677 21,144 1,623 400,198 169,118 183,532
Work in progress 616,225 601,058
Assets under capital lease 448 77 525 77
Total 3,584,639 196,714 53,107 3,728,246 2,576,982 2,555,717



9. Accounts payable and accrued liabilities

The following table presents details of the DFO's accounts payable and accrued liabilities:

(in thousands of dollars)
  Forecast
2012
Estimated
Balances 2011
Accounts payable to external parties 162,514 177,552
Accounts payable to other government departments and agencies 49,990 54,615
Accrued liabilities 98,889 108,038
Total accounts payable and accrued liabilities 311,393 340,205


10. Lease obligation for tangible capital assets

The DFO has entered into agreements to rent information technology equipment under capital lease with a cost of $0.53M and accumulated amortization of $0.45M as at March 31, 2011 (Note 8). The obligations for the upcoming years include the following:

(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Maturing year
2012 59
2013 and thereafter
Total future minimum lease payments 59
Less: imputed interest (4.1%) 1
Balance of obligations under leased tangible capital assets 58


11. Other liabilities

Other liabilities represent deffered revenue funds received by the DFO under regulations, cost-sharing agreements or to fund projects. Details of the transactions related to these accounts are as follows:

(in thousands of dollars)
  Opening balance
April 1, 2011
Receipts and other credits Payments and other charges Closing balance
March 31, 2012
Research projects deposits 21,822 23,966 25,813 19,975
Federal / provincial cost sharing agreements 1,314 1,404 1,515 1,203
Sales of seized assets - Fisheries Act 1,055 456 545 966
Contractors' security deposits 395 334 368 361
Deferred revenue 23 23
Total 24,609 26,160 28,241 22,528

  • Research projects deposits: This account was established to record contributions received from organizations and individuals, for the furtherance of research work.

  • Federal/provincial cost-sharing agreements: This account was established to record the deposit of money received from the provinces for cost-shared programs. The funds are disbursed according to agreements.

  • Sale of seized assets: This account was established to record the proceeds of sale of seized items by the DFO from a person contravening the Fisheries Act. Money so received is held in the Consolidated Revenue Fund pending final resolution of the case by the Minister of Fisheries and Oceans or the courts.

  • Contractor security deposits: This account was established to record money held to ensure that a contractor's obligations under contracts are carried out, to protect the interests of subcontractors, sub-subcontractors and suppliers, and to protect the Crown against loss should a bidder fail to honor a contract.

  • Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties which are restricted to fund the expenditures related to specific research projects and amounts received for fees prior to services being performed. Revenue is recognized in the period that these expenditures are incurred or the service is performed.

12. Employee future benefits

(a) Pension benefits

The DFO's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation. Both the employees and the DFO contribute to the cost of the Plan.

The DFO's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits

The DFO provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, are as follows:

(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Accrued benefit obligation, beginning of year 164,276 157,524
Expense for the year 21,292 20,925
Benefits paid during the year (14,250) (14,173)
Accrued benefit obligation, end of year 171,318 164,276


13. Environmental and Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are grouped into two categories as follows:

(a) Contaminated sites

Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the DFO is obligated or likely to be obligated to incur such costs. The DFO has identified sites where such action is possible and for which a liability of $71.1 million ($70.0 million in 2010-11) has been recorded. The DFO has estimated additional costs of $148.9 million ($148.9 million in 2010-2011) that are not accrued, as these are not considered likely to be incurred at this time.

The DFO's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued by the department in the year in which they become likely and are reasonably estimable.

(b) Claims and litigation

Claims have been made against the DFO in the normal course of operations. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued ($0.2 million in 2011-2012 and $0.2 million in 2010-2011) and an expense recorded in the financial statements.


14. Equity of Canada


(in thousands of dollars)
  Forecast
2012
Estimated
Balances
2011
Restricted Equity of Canada, April 1 1,463 1,346
Supplementary Fish Fines Account
Revenues 364 354
Expenses (225) (237)
Restricted Equity of Canada, March 31 1,602 1,463
Unrestricted Equity of Canada, March 31 2,290,399 2,276,992
Total Equity of Canada, end of year 2,292,001 2,278,455


15. Contractual Obligations

The nature of the Department's activities can result in some large multi-year contracts and obligations whereby the department will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)
  2011 2012 2013 2014 2015 and
thereafter
Total
Operating lease 12,659 12,659 12,659 12,658 12,658 63,293
Total 12,659 12,659 12,659 12,658 12,658 63,293


16. Related party transactions

The DFO is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The DFO enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the DFO received services which were obtained without charge from other Government departments as presented in part (a).

(a) Common services provided without charge by other government departments

During the year, the DFO receives without charge from other departments, accommodation, legal fees and the employer's contribution to the health and dental insurance plans, administration costs and commissions paid to provincial workers' compensation boards. These services without charge have been recognized in the DFO's Statement of Operations as follows:

(in thousands of dollars)
  Forecast
2012
Estimated Balances
2011
Employer's contribution to the health and dental insurance plans 67,478 65,512
Accommodation 47,055 44,906
Administration costs and commissions paid to provincial workers' compensation boards by Social Development Canada 980 1,032
Legal services 3,383 3,333
Total services provided without charge 118,896 114,783

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the DFO's Statement of Operations.

(b) Other transactions with related parties

(in thousand of dollars)
  Forecast
2012
Estimated Balances
2011
Accounts payable to other government departments and agencies 49,990 54,615
Accounts receivable from other government departments and agencies 11,940 11,940


17. Segmented information

Presentation by segment is based on the DFO's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in Note 4. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

(in thousand of dollars)
  Economic Prosperous Maritime Sectors and Fisheries Sustainable Aquatic Ecosystems Safe and Secure Waters Internal Services Total Forecast
2012
Estimated Balances
2011
Operating expenses
Salaries and employee benefits 202,496 199,689 416,662 172,560 991,407 1,001,749
Professional and special services 78,337 57,715 44,331 57,437 237,820 275,089
Amortization of tangible capital assets 69,332 12,008 71,497 43,876 196,713 181,851
Repair and maintenance 46,463 3,620 64,351 14,829 129,263 168,380
Utilities, material, supplies, and fuel 10,193 12,919 65,903 8,039 97,054 113,370
Machinery and equipment 4,797 7,664 33,098 7,842 53,401 62,637
Travel and relocation 13,025 17,022 19,646 6,564 56,257 62,010
Loss on write-offs and write-downs 12,447 435 9,462 7,675 30,019 29,230
Rental 12,796 4,808 3,405 2,816 23,825 25,794
Telecommunication 2,705 3,281 8,196 4,820 19,002 20,822
Communication services 1,649 999 1,045 1,194 4,887 5,347
Other 173 474 1,332 885 2,864 3,401
Total operating expenses 454,413 320,634 738,928 328,537 1,842,512 1,949,680
Transfer Payments
First Nations and Inuit People 91,103 169 91,272 95,949
Non-profit organizations 18,013 4,223 7,762 29,998 31,176
Individuals 3,830 3,830 3,858
Other level of governments within Canada 1,915 1,915 1,929
Other countries and international organizations 197 416 613 617
Industry 26 26 26
Total transfer payments 115,058 4,808 7,788 127,654 133,555
Total Expenses 569,471 325,442 746,716 328,537 1,970,166 2,083,235
Revenues
Sales of goods and services 49,216 36,184 85,400 83,008
Other revenue 3,704 2,724 6,428 6,248
Total revenues 52,920 38,908 91,828 89,256
Net cost of operations 516,551 325,442 707,808 328,537 1,878,338 1,993,979