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Future-Oriented Statement of Operations 2020-2021

Future-Oriented Statement of Operations (unaudited)
For the Year Ending March 31
(in dollars)

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Future-Oriented Statement of Operations (unaudited) For the year ending March 31
  Forecast Results
2019-20
Planned Results
2020-21
Expenses
Innovation $ 89,403,330 $ 75,734,923
Community Initiatives 56,132,689 54,324,547
Business Growth 79,352,144 48,206,808
Business Services 42,022,858 43,753,940
Internal Services 14,718,470 14,151,031
Expenses incurred on behalf of government (28,811,088) (13,513,917)
Total expenses 252,818,403 222,657,332
 
Revenues
Interest 98,539 120,757
Amortization of discount 294,391 19,475
Other 2,443 2,469
Revenues earned on behalf of government (393,016) (140,331)
Total revenues 2,357 2,370
 
Net cost of operations before government funding and transfers $ 252,816,046 $ 222,654,962

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


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 government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2019–20 is based on actual results as at November 30, 2019 and on forecasts for the remainder of the fiscal year.  Forecasts have been made for the planned results for fiscal year 2020–21.

The main assumptions underlying the forecasts are as follows:

These assumptions are made as at November 30, 2019.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2019–20 and for 2020–21, 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 2019–20, 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

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 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.

Deferred revenue consists of amounts received in advance of the delivery of goods and rendering of services that will be recognized as revenue in a subsequent fiscal year as it is earned.

Other revenues are recognized in the period the event giving rise to the revenues occurred. 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
2019-20
Planned Results
2020-21
(in dollars)
Net cost of operations before government funding and transfers $ 252,816,046 $ 222,654,962
 
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (18,608) (18,616)
Services provided without charge by other government departments (5,004,897) (5,639,888)
Decrease (increase) in vacation pay and compensatory leave 108,332 (158,883)
Decrease (increase) in employee future benefits (127,522) (183,943)
Decrease (increase) in accrued liabilities not charged to authorities 307,710 833,774
Refunds of previous years' expenditures 395,324 503,481
Other 2,357 2,370
Total items affecting net cost of operations but not affecting authorities (4,337,304) (4,661,705)
 
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 207,075 178,970
Transition payments for implementing salary payments in arrears 1,313 0
Unconditionally repayable transfer payments 67,117,570 56,596,388
Increase in employee advances 22,262 16,778
Total items not affecting net cost of operations but affecting authorities 67,348,220 56,792,136
 
Requested authorities forecasted to be used $ 315,826,962 $ 274,785,393

b) Authorities requested

  Forecast Results
2019-20
Planned Results
2020-21
(in dollars)
Authorities provided/requested
Vote 1 - Operating expenditures $ 44,567,705 $ 42,119,210
Vote 5 - Transfer payments 266,443,500 228,161,383
Statutory amounts 4,815,757 4,504,800
Total authorities provided/requested $ 315,826,962 $ 274,785,393
Less: Estimated unused authorities and other adjustments 0 0
Requested authorities forecasted to be used $ 315,826,962 $ 274,785,393
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