Western Economic Diversification Canada
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Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31

(in dollars)

Forecast
Results
2015-16
Planned
Results
2016-17
The accompanying notes form an integral part of the future-oriented statement of operations.
Expenses
Business Development and Innovation $ 81,888,465 $ 82,851,377
Community Economic Growth 31,550,680 56,993,254
Policy, Advocacy and Coordination 10,118,070 9,385,095
Internal Services 16,728,377 13,965,032
Expenses incurred on behalf of Government (2,995,241) (56,901)
Total expenses 137,290,351 163,137,857
Revenues
Amortization of discount 63,391 92,016
Interest 30,366 44,086
Other 828,883 1,688
Revenues earned on behalf of Government (921,468) (136,546)
Total revenues 1,172 1,244
Net cost of operations before government funding and transfers $ 137,289,179 $ 163,136,613


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

1. Methodology and Significant Assumptions

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

The information in the estimated results for fiscal year 2015–16 is based on actual results as at November 30, 2015 and on forecasts for the remainder of the fiscal year.  Forecasts have been made for the planned results for the 2016–17 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • The department'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 experience. The general historical pattern is expected to continue.
  • Allowances for uncollectible accounts are based on historical experience.  The general historical pattern is expected to continue.

These assumptions are adopted as at November 30, 2015.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2015–16 and for 2016–17, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this future-oriented statement of operations, Western Economic Diversification Canada (WD) 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 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 following:

  • The timing and amount 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 both the amount of revenue earned and the collectability of loan receivables.
  • Interest rates in effect at the time of issue will affect the net present value of non-interest bearing loans.
  • 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, WD will not be updating the forecasts 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 using 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 WD'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 and expenses are recorded as the benefits are earned by employees under their 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 that 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. 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 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 year.

    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 WD's liabilities. While the deputy head is expected to maintain accounting control, 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 in reduction of the entity's gross revenues.

4. Parliamentary Authorities

WD is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to WD do not parallel financial reporting according to generally accepted accounting principles because 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, WD 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:

Forcast Results
2015-16
Planned Results
2016-17
(in dollars)
Net cost of operations before government funding and transfers $ 137,289,179 $ 163,136,613
Adjustments for items affecting net cost of operations
but not affecting authorities:
Amortization of tangible capital assets (122,187) (42,779)
Gain (loss) on disposal of tangible capital assets 1,172 1,244
Services provided without charge by other government departments (5,764,584) (5,207,005)
Decrease in vacation pay and compensatory leave 154,181 44,249
Decrease (increase) in employee future benefits 31,887 (794)
Decrease in accrued liabilities not charged to authorities 794,838 1,283,146
Refund of previous years' expenditures 4,333,405 862,446
Total items affecting net cost of operations but not affecting authorities (571,288) (3,059,493)
Adjustments for items not affecting net cost of operations
but affecting authorities:
Transition payment for salary payments in arrears 22,785 0
Unconditionally repayable transfer payments 22,537,605 13,314,416
Total items not affecting net cost of operations but affecting authorities 22,560,390 13,314,416
Forecast current year lapse 2,482,785 0
Requested authorities $ 161,761,066 $ 173,391,536

b) Authorities requested

Forcast Results
2015-16
Planned Results
2016-17
(in dollars)
Authorities requested
Vote 1 - Operating expenditures $ 41,158,128 $ 34,870,554
Vote 5 - Transfer payments 116,419,215 134,432,914
Statutory amounts 4,183,723 4,088,068
Requested authorities $ 161,761,066 $ 173,391,536