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Future-oriented Financial Statements of Fisheries and Oceans Canada

For the years ending March 31, 2012 and March 31, 2013

Fisheries and Oceans Canada
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 November 30, 2011 and reflect the plans described in the Report on Plans and Priorities.


Roch Huppé, Chief Financial Officer
Ottawa, Canada
March 12, 2012
Claire Dansereau, Deputy Minister
Ottawa, Canada
March 12, 2012

 

Future-oriented Statement of Financial Position (unaudited)
At March 31


(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Assets
Financial Assets
Due from Consolidated Revenue Fund 299,161 247,633
Accounts receivable and advances (Note 6) 20,820 20,776
Total financial assets 319,981 268,409
Non-Financial Assets
Inventory (Note 7) 32,198 28,319
Tangible capital assets (Note 8) 2,659,060 2,693,283
Total non-financial assets 2,691,258 2,721,602
  3,011,239 2,990,011
LIABILITIES AND EQUITY OF CANADA
Liabilities
Accounts payable and accrued liabilities (Note 9) 299,418 247,851
Vacation pay and compensatory leave 64,221 58,238
Deferred revenues (Note 10) 8,832 8,814
Other liabilities (Note 12) 23,110 19,130
Employee future benefits (Note 13) 91,012 82,533
Environmental and contingent liabilities (Note 14) 108,699 108,699
Total liabilities 595,292 525,265
Equity of Canada (Note 15) 2,415,947 2,464,746
  3,011,239 2,990,011
Contractual obligations (Note 16)
Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to November 30, 2011.
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)
  Estimated
Results
2012
Planned
Results
2013
Expenses
Economically Prosperous Maritime Sectors and Fisheries 562,973 432,935
Sustainable Aquatic Ecosystems 329,309 287,477
Safe and Secure Waters 759,245 734,090
Internal Services 328,154 313,944
Total Expenses 1,979,681 1,768,446
Revenues
Economically Prosperous Maritime Sectors and Fisheries 52,598 52,393
Safe and Secure Waters 39,130 39,143
Total Revenues 91,728 91,536
Net Cost from Continuing Operations 1,887,953 1,676,910
 
Transfer of Operations    
Expenses 9,263 -
Total Net Cost of Transferring Operations 9,263 -
     
Net Cost of Operations 1,897,216 1,676,910
Segmented Information (Note 18)
Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to November 30, 2011.
The accompanying notes form an integral part of these future-oriented financial statements.

Future-oriented Statement of Equity (unaudited)
For the Year Ended March 31


(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Equity of Canada, beginning of year 2,244,586 2,415,947
Net cost of operations (1,897,216) (1,676,910)
Net cash provided by Government 1,955,706 1,671,520
Change in due to/from the Consolidated Revenue Fund 10,367 (51,528)
Services provided without charge by other government departments (Note 17) 110,277 105,717
Transfer of assets and liabilities to other government departments (Note 19) (7,773) -
Equity of Canada, end of year 2,415,947 2,464,746
Information for the year ended March 31, 2012 includes actual amounts from April 1, 2011 to November 30, 2011.
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)
  Estimated
Results
2012
Planned
Results
2013
Operating activities
Net cost of operations 1,897,216 1,676,910
Non-cash Items:
Amortization of tangible capital assets (192,978) (196,929)
Net loss on disposal of tangible capital assets (7,670) (13,439)
Services provided without charge by other government departments (110,277) (105,717)
Variations in Future-oriented Statement of Financial Position:
Decrease in accounts receivable and advances (3,141) (44)
Increase (Decrease) in inventory 5,946 (3,879)
Decrease (Increase) in accounts payable and accrued liabilities (10,028) 51,567
Decrease in vacation pay and compensatory leave 8,244 5,983
Decrease in deferred revenues 17 18
Decrease in employee future benefits 73,929 8,479
Decrease in other liabilities 6,925 3,980
Cash used in operating activities 1,668,183 1,426,929
 
Capital investing activities:
Acquisitions of tangible capital assets 289,748 246,984
Proceeds from the disposal of tangible capital assets (2,284) (2,393)
Cash used in capital investing activities 287,464 244,591
 
Financing activities:
Lease payments for tangible capital assets 59 -
Cash used in financing activities 59 -
Net cash provided by Government of Canada 1,955,706 1,671,520
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.

Notes to the Future-oriented Financial Statements (Unaudited)

1. Authority and Objectives

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

The mandate of DFO, on behalf of the Government of Canada, is to develop and implement policies and programs in support of Canada’s economic, social, ecological and scientific interests in oceans and fresh waters.

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

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.

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, DFO contributes to the capacity of Canada’s Maritime Sectors and Fisheries to derive economic benefits and further enhance their competitiveness.

Sustainable Aquatic Ecosystems: 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: 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. Methodology and 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 were adopted as at November 30, 2011 and are as follows:

  1. The department's activities will remain substantially the same as for the previous year except for the transfer of Information Technology Services to Shared Services Canada as per Order-in-Council P.C. 2011-1291 and P.C. 2011-1297, effective November 15, 2011.

  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 2011-2012 is used as the opening position for the 2012-2013 planned results.



3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2011-2012 and for 2012-2013, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these future-oriented financial statements, DFO 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 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. Implementation of new collective agreements.

  3. Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.

  4. Interest rates in effect at the time of issue will affect the net present value of non-interest bearing loans.

  5. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

DFO will not be updating the forecasts for any changes to authorities or forecast financial information made in ensuing supplementary estimates.



4. Summary of Significant Accounting Policies

The future-oriented financial statements have been prepared in accordance with Treasury Board accounting policies. These accounting policies, stated below, are based on 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 Future-oriented Statement of Operations and the Future-oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. The notes provide a reconciliation between the bases of reporting.

  2. Net Cash Provided by Government: 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 that occur at year-end from the time 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 parliamentary expenditure authorities to discharge its liabilities.

  4. Revenues are recorded 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 recorded 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 future-oriented 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 contributions 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. 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 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 the contingency is disclosed in the notes 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 DFO becomes aware of the contamination and is obligated, or is likely to be obligated to incur such costs. If the likelihood of 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 the notes 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. DFO does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on First Nations 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 5-10 years
Ships and boats 5-40 years
Aircraft 15-25 years
Vehicles 5-20 years
Leasehold improvements Period of expected use; lesser of economic life of the improvement or the lease term
Assets under capital leases Period of expected use; lesser of economic life of the improvement or the 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

DFO receives most of its funding through expenditure authorities provided by Parliament. Items recognized in the Future-oriented Statements of Operations and Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, 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:

a) Authorities requested


(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Authorities requested
Vote 1 – Operating expenditures 1,377,713 1,157,765
Vote 5 – Capital expenditures 367,283 313,589
Vote 10 – Grants and contributions 129,472 61,786
Statutory amounts 137,919 132,667
Total authorities requested 2,012,387 1,665,807

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.

b) Reconciliation of net cost of operations to authorities requested


(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Net cost of operations 1,897,216 1,676,910
Adjustments for items affecting net cost of operations but not affecting authorities:  
Amortization of tangible capital assets (192,978) (196,929)
Net loss on disposal of tangible capital assets (7,670) (13,439)
Services provided without charge by other government departments (110,277) (105,717)
Increase (decrease) in inventory 5,946 (3,879)
Decrease in vacation pay and compensatory leave 8,244 5,983
Decrease in employee future benefits 73,929 8,479
Refunds from previous years expenditures 4,525 3,912
Revenue not available for spending 43,814 43,621
Earmarked Supplementary Fish Fines (169) (118)
Total adjustments for items affecting net cost of operations but not affecting authorities (174,636) (258,087)
Adjustments for items not affecting net cost of operations but affecting authorities  
Acquisitions of tangible capital assets 289,748 246,984
Decrease in lease obligation of tangible capital lease 59 -
Total adjustments for items not affecting net cost of operations but affecting authorities 289,807 246,984
Forecast authorities available 2,012,387 1,665,807



6. Account receivable and advances

The following table presents details of the Department's accounts receivable and advances balances:

(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Accounts receivable
Receivables from external parties 33,159 33,089
Receivables from other federal government departments and agencies 12,265 12,239
Accrued interest on loans 1,469 1,466
Refund of program expenses 209 208
Less: Allowance for doubtful accounts on receivables from external parties (26,516) (26,460)
Total accounts receivable 20,586 20,542
Loans and advances
Accountable advances 234 234
Loans 1,472 1,472
Less: Allowance on loans and advances (1,472) (1,472)
Total loans and advances 234 234
Total accounts receivable and advances 20,820 20,776



7. Inventory

The following table presents details of the inventory:

(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Inventory held for future program delivery 30,749 27,045
Inventory for resale 1,449 1,274
Total inventory 32,198 28,319



8. Tangible capital assets


(in thousands of dollars)
  Cost
Opening balance
April 1, 2012
Acquisitions Disposals/ write-offs / other Work in progress transfers Closing balance
March 31, 2013
Land 20,876 341 77 - 21,140
Buildings 560,158 272 1,755 30,479 589,154
Works and infrastructure 2,287,497 247 9,683 113,557 2,391,618
Machinery and equipment 325,796 5,384 19,883 16,912 328,209
Informatics 33,225 1,062 7,108 8,193 35,372
Other equipment 79 44 68 - 55
Ships and boats 1,784,842 1,186 18,155 53,506 1,821,379
Aircraft 35,687 - 1,521 1,553 35,719
Vehicles 74,189 8,274 7,740 191 74,914
Leasehold improvements 580,445 99 2,765 14,332 592,111
Work in progress 495,706 230,075 18,770 (238,723) 468,288
Assets under capital lease 525 - - - 525
Total 6,199,025 246,984 87,525 - 6,358,484


(in thousands of dollars)
  Accumulated Amortization Net Book Value
Opening
balance
April 1,
2012
Amortization Disposals/ write-offs Closing balance
March 31, 2013
March 31, 2012 March 31, 2013
Land - - - - 20,876 21,140
Buildings 376,391 21,918 1,355 396,954 183,767 192,200
Works and infrastructure 1,193,799 70,894 9,248 1,255,445 1,093,698 1,136,173
Machinery and equipment 212,004 18,216 23,342 206,878 113,792 121,331
Informatics 25,942 8,803 7,994 26,751 7,283 8,621
Other equipment 34 20 45 9 45 46
Ships and boats 1,269,052 47,558 16,790 1,299,820 515,790 521,559
Aircraft 30,939 1,516 1,541 30,914 4,748 4,805
Vehicles 43,848 7,011 8,804 42,055 30,341 32,859
Leasehold improvements 387,431 20,993 2,574 405,850 193,014 186,261
Work in progress - - - - 495,706 468,288
Assets under capital lease 525 - - 525 - -
Total 3,539,965 196,929 71,693 3,665,201 2,659,060 2,693,283



9. Accounts payable and accrued liabilities

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

(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Accounts payable to external parties 161,545 133,722
Accounts payable to other government departments and agencies 45,880 37,979
Total accounts payable 207,425 171,701
Accrued liabilities 91,993 76,150
Total accounts payable and accrued liabilities 299,418 247,851



10. Deferred revenue

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

(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Opening balance 8,849 8,832
Amounts expected to be received 8,809 8,791
Revenue recognized (8,826) (8,809)
Closing balance 8,832 8,814



11. Lease obligation for tangible capital assets

DFO has entered into agreements to rent information technology equipment under capital leases with a cost of $0.53M and accumulated amortization of $0.53M as at March 31, 2012 (Note 8). There are no obligations for the upcoming years.



12. Other liabilities

Other liabilities represent deferred revenue funds received by 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)
  Estimated
Results
2012
Planned
Results
2013
Research projects deposits 21,007 17,388
Federal/provincial cost sharing agreements 928 769
Sales of seized assets - Fisheries Act 843 698
Contractor's security deposits 332 275
Total other liabilities 23,110 19,130

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 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.



13. Employee future benefits

a) Pension benefits

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 DFO contribute to the cost of the Plan.

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

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. As part of the collective agreements for the Program and Administration Services, Operational Services and Education and Library Science groups, indeterminate and term employees on June 22, 2011 were entitled to receive a single payment in lieu of severance pay. Information about the severance benefits, measured as at March 31, are as follows:

(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Accrued benefit obligation, beginning of the year 165,074 91,012
Expense for the year (12,434) 6,199
Benefits paid during the year (61,495) (14,678)
Transfer of obligation to other federal department (Note 19) (133) -
Total severance benefits 91,012 82,533



14. 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 DFO is obligated or likely to be obligated to incur such costs. As at the date of these future-oriented financial statements DFO has identified sites where such action is possible and for which a liability of $108.7 million has been recorded. DFO has estimated additional costs of $130.4 million that are not accrued, as these are not considered likely to be incurred at this time. Additional new sites, changes in remediation approach or material changes in amounts accrued or not accrued are not forecasted for the future years presented in these statements. However, 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 can be reasonably estimated.

b) Claims and litigation

Claims have been made against the Department in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. Based on the Department's assessment as at the date of the preparation of these future-oriented financial statements, legal proceedings for claims estimated at $90,459.4 million are pending. 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 accrued liability will be estimated.



15. Restricted Equity of Canada

A portion of the Department's equity is restricted to be used for a specific purpose. Related revenues and expenses are included in the Statement of Operations.

The Supplementary Fish Fines Account was established pursuant to the Fisheries Act and related regulations to record fines and penalties levied by courts under the Act. The balance in the account is to be used for remedial or preventive action to fish habitat as well as the promotion of proper management, control, conservation, and protection of fisheries or fish habitat. The balance of the account at the end of the year is included in Equity of Canada. Activity in the account is as follows:

(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Restricted Equity of Canada, beginning of year 1,092 923
Supplementary Fish Fines Account
Revenues 129 128
Expenses (298) (247)
Restricted Equity of Canada, end of year 923 804
Unrestricted Equity of Canada, end of year 2,415,024 2,463,942
Total Equity of Canada, end of year 2,415,947 2,464,746



16. 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)
  2012 2013 2014 2015 Total
Construction of assets 74,613 68,484 17,179 2,259 162,535
Operating lease 12,659 12,659 12,659 12,659 50,636
Total 87,272 81,143 29,838 14,918 213,171



17. Related party transactions

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

a) Common services provided without charge by other government departments

During the year, DFO receives services without charge from certain common service organizations, related to 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 DFO’s Statement of Operations as follows:

(in thousands of dollars)
  Estimated
Results
2012
Planned
Results
2013
Employer's contribution to the health and dental insurance plans 58,701 53,241
Accommodation 47,211 48,142
Legal services 3,333 3,383
Worker’s compensation 1,032 951
Total 110,277 105,717

b) Other transactions with related parties

(in thousand of dollars)
  Estimated
Results
2012
Planned
Results
2013
Expenses – other government departments and agencies 285,900 236,661
Revenues – other government departments and agencies 31 31



18. Segmented information

Presentation by segment is based on 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)
  2012 2013
  Total Economically Prosperous Maritime Sectors and Fisheries Sustainable Aquatic Ecosystems Safe and Secure Waters Internal Services Total
Transfer Payments
First Nations and Inuit people 93,095 44,220 206 - - 44,426
Non-profit organizations 28,765 8,138 699 4,890 - 13,727
Individuals 5,638 2,685 5 - - 2,690
Other level of governments within Canada 1,481 707 - - - 707
Other countries and international organizations 493 67 52 116 - 235
Total transfer payments 129,472 55,817 962 5,006 - 61,785
 
Operating expenses
Salaries and employee benefits 989,740 165,001 176,162 399,465 153,974 894,602
Professional and special services 282,047 61,106 51,728 58,328 56,641 227,803
Amortization of tangible capital assets 192,978 67,213 9,536 67,823 52,356 196,928
Repair and maintenance 116,650 36,301 3,231 64,462 13,418 117,412
Utilities, materials, supplies and fuel 84,974 10,354 11,011 70,864 5,833 98,062
Travel and relocation 60,909 12,941 15,530 18,564 5,143 52,178
Machinery and equipment 49,058 4,877 6,780 31,631 7,532 50,820
Loss on write-offs and write-downs 21,584 5,773 854 9,100 7,087 22,814
Telecommunications 18,794 2,286 2,940 7,901 3,874 17,001
Rental 20,980 6,743 5,396 2,198 1,465 15,802
Other 7,393 3,573 2,444 (2,347) 5,531 9,201
Communication services 5,102 950 903 1,095 1,090 4,038
Total operating expenses 1,850,209 377,118 286,515 729,084 313,944 1,706,661
Total expenses 1,979,681 432,935 287,477 734,090 313,944 1,768,446
 
Revenues
Sales of goods and services 84,048 48,006 - 35,866 - 83,872
Other revenue 7,680 4,387 - 3,277 - 7,664
Total revenues 91,728 52,393 - 39,143 - 91,536
Net cost from continuing operations 1,887,953 380,542 287,477 694,947 313,944 1,676,910



19. Transfer to other government departments

Effective November 15, 2011, the Department will transfer responsibility for the delivery of Information Technology Services to Shared Services Canada as per Order-in-Council P.C. 2011-1291 and P.C. 2011-1297. Accordingly, the Department will transfer the following balances of assets, liabilities, and expenses to Shared Services Canada by March 31, 2012:

(in thousands of dollars)
  Effect of
transfer
Assets
Tangible capital assets (net book value) (7,999)
Liabilities
Vacation pay and compensatory leave (93)
Employee future benefits (Note 13) (133)
Adjustment to Equity of Canada (7,773)