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

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(in dollars)

Future-Oriented Statement of Operations (unaudited) For the year ending March 31
  Forecast
Results
2017-18
Planned
Results
2018-19
Expenses
Business Growth $ 0 $ 49,003,324
Business Services 0 45,657,675
Innovation 0 34,706,131
Internal Services 14,537,688 13,471,736
Community Initiatives 0 1,676,145
Business Development and Innovation 109,591,350 0
Community Economic Growth 95,360,691 0
Policy, Advocacy and Coordination 10,780,294 0
Expenses incurred on behalf of government (22,295,062) (1,117,638)
Total expenses 207,974,961 143,397,373
 
Revenues
Amortization of discount 0 373,024
Interest 69,933 89,291
Other 7,814 2,274
Revenues earned on behalf of government (69,987) (462,375)
Total revenues 7,760 2,214
 
Net cost of operations before government funding and transfers $ 207,967,201 $ 143,395,159

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.


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1. Methodology and significant assumptions

 

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

The information in the forecast results for fiscal year 2017–18 is based on actual results as at November 30, 2017 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2018–19.

The main assumptions underlying the forecasts are as follows:

These assumptions are made as at November 30, 2017.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2017–18 and for 2018–19, 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, Western Economic Diversification Canada (WD) 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:

After the Departmental Plan is tabled in Parliament, 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 Results Report.

3. Summary of significant accounting policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada's accounting policies in effect for fiscal year 2017–18, and is 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

WD records expenses on an accrual basis.

Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.

Other expenses are generally recorded when goods are received or services are rendered and include expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.

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 WD 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 WD's liabilities. Although the deputy head is expected to maintain accounting control, he 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 WD's gross revenues.

4. Parliamentary authorities

WD is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to WD 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, 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

  Forecast Results
2017-18
Planned Results
2018-19
(in dollars)
Net cost of operations before government funding and transfers $ 207,967,201 $ 143,395,159
 
Adjustments for items affecting net cost of operations
but not affecting authorities:
Amortization of tangible capital assets (25,028) (17,130)
Gain on disposal of tangible capital assets 7,760 2,214
Services provided without charge by other government departments (5,295,684) (5,260,376)
(Increase) decrease in vacation pay and compensatory leave (55,441) 46,540
Decrease (increase) in employee future benefits 55,997 (178,465)
Decrease in accrued liabilities not charged to authorities 378,539 568,394
Refund of previous years' expenditures 11,735 184,398
Total items affecting net cost of operations but not affecting authorities (4,922,122) (4,654,425)
 
Adjustments for items not affecting net cost of operations
but affecting authorities:
Transition payments for implementing salary payments in arrears 2,049 0
Unconditionally repayable transfer payments 22,047,994 10,822,644
Total items not affecting net cost of operations but affecting authorities 22,050,043 10,822,644
 
Forecast current year lapse 6,979,580 0
 
Requested authorities $ 232,074,702 $ 149,563,378

b) Authorities requested

  Forecast Results
2017-18
Planned Results
2018-19
(in dollars)
Authorities requested
Vote 1 - Operating expenditures $ 38,617,715 $ 35,965,364
Vote 5 - Transfer payments 189,690,082 109,773,000
Statutory amounts 3,766,905 3,825,014
Total authorities requested $ 232,074,702 $ 149,563,378
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