Departmental Plan 2019-2020

Future Oriented Statement of Operations (Unaudited)

For the year ending March 31


(in thousands of dollars)
  Forecast Results
2018-19
Planned Results
2019-20
Expenses
Fisheries $804,569 $847,364
Aquatic Ecosystems 236,147 275,834
Marine Navigation 305,337 321,201
Marine Operations and Response 717,450 720,794
Internal Services 403,871 424,569
Total expenses 2,467,374 2,589,762
Revenues
Sales of goods and services 86,815 86,970
Other revenues 4,135 4,244
Revenues earned on behalf of Government (51,949) (51,203)
Total revenues 39,001 40,011
Net cost of operations before government funding and transfers $2,428,373 $2,549,751

The accompanying notes form an integral part of these future-oriented financial statements.

 

Notes to the Future-Oriented Statement of Operations

1. Departmental Core Responsibilities

In 2018-19, Fisheries and Oceans Canada transitioned from a reporting framework comprising Strategic Outcomes and Program Alignment Architecture to a Departmental Results Framework comprising Core Responsibilities and Departmental Results (see note 6). For more information on Fisheries and Oceans Canada's Core Responsibilities, see the "Planned results" section of the Departmental Plan.

 

2. Methodology and significant assumptions

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

The information in the forecast results for fiscal year 2018-19 is based on actual results as at September 30, 2018, and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2019-20 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • The activities of Fisheries and Oceans Canada 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 past experience. The general historical pattern is expected to continue.
  • Allowances for doubtful accounts are based on historical experience. The general historical pattern is expected to continue.

These assumptions are made as at September 30, 2018.

 

3. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2018-19 and for 2019-20, 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, Fisheries and Oceans Canada 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:

  • the timing and amount of acquisitions and disposals of property, plant and equipment which may affect gains, losses and amortization expense;
  • the implementation of new collective agreements;
  • economic conditions, which may affect both the amount of revenue earned and the collectability of loan receivables; and
  • other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

After the Departmental Plan is tabled in Parliament, Fisheries and Oceans Canada 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.

 

4. Summary of significant accounting policies

Significant accounting policies are as follows:

(a) Expenses
Expenses are recorded on an accrual basis.

Expenses for Fisheries and Oceans Canada's operations are recorded when goods are received or services are rendered, including services provided without charge for accommodation, employer contributions to health and dental insurance plans, legal services and workers' 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 terms of employment.

Transfer payments are recorded as expenses when the recipients have met all the eligibility criteria and the transfers are authorized by March 31. In the case of transfers that do not form part of an existing program, the transfers are considered to be authorized 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.

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 and inventory obsolescence 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 fiscal year.

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 are recorded as deferred revenue, provided Fisheries and Oceans Canada has an obligation to other parties for the provision of goods, services or the use of assets in the future.

Other 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 Fisheries and Oceans Canada’s liabilities. Although the deputy head is expected to maintain accounting control, she has no authority over 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 department's gross revenues.

5. Parliamentary Authorities

Fisheries and Oceans Canada is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department 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, Fisheries and Oceans Canada 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
2018-19
Planned Results
2019-20
Net cost of operations before government funding and transfers $2,428,373 $2,549,751
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (237,229) (241,878)
Net loss on disposal of tangible capital assets (12,712) (12,690)
Services provided without charge by other government departments (119,435) (123,231)
Increase in vacation pay and compensatory leave (6,664) (8,797)
Increase in environmental liability (4,105) (1,897)
Decrease in employee future benefits not charged to authorities 2,796 2,320
Decrease in inventory 3,958 5,716
Bad debt expense (548) (373)
Refunds of previous years' expenditures 5,571 5,876
(Increase) decrease in earmarked supplementary fines (96) (92)
Other 955 1,099
Total items affecting net cost of operations but not affecting authorities (367,509) (373,947)
 
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 1,549,387 801,787
Total items not affecting net cost of operations but affecting authorities 1,549,387 801,787
 
Requested authorities $3,610,251 $2,977,591

(b) Authorities requested

(in thousands of dollars)
  Forecast Results
2018-19
Planned Results
2019-20
Authorities requested
Vote 1 – Operating expenditures $1,653,980 $1,727,118
Vote 5 – Capital expenditures 1,549,387 801,787
Vote 10 – Grants and contributions 271,008 293,046
Statutory amounts 135,876 155,640
Total authorities requested $3,610,251 $2,977,591

6. Comparative information

The Forecast results are presented by Core Responsibilities in accordance with Fisheries and Oceans Canada's new Departmental Results Framework.