| Estimated Results 2015-16 |
Planned Results 2016-17 |
|
|---|---|---|
| Expenses | ||
| Technological Innovation | $40,002 | $66,418 |
| Business Development | 15,807 | 32,441 |
| Community Economic Development | 49,012 | 65,868 |
| Internal Services | 19,117 | 21,127 |
| Expenses incurred on behalf of Government | 4,535 | 3,656 |
| Total expenses | 128,473 | 189,510 |
| Revenues | ||
| Amortization of discounts | 788 | 1,365 |
| Revenues earned on behalf of Government | (788) | (1,365) |
| Total revenues | 0 | 0 |
| Net cost of operations | $128,473 | $189,510 |
The accompanying notes form an integral part of the future-oriented statement of operations.
Notes to the Future-Oriented Statements of Operations
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 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:
- FedDev Ontario'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 historical 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.
- Transfer payment spending is based on historical spending patterns and anticipated stakeholder requirements.
These assumptions were adopted as at November 30, 2015.
2. Variations and Changes to the Forecasted 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 the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) 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 statement of operations and the historical statement of operations include the following:
- Economic conditions may affect 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.
- Value of the Canadian dollar and its impact on the cost of imported goods.
- Implementation of new collective agreements.
- 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, FedDev Ontario will not be updating the forecasts for any changes in financial resources made as part of subsequent 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 the 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:
Expenses
Expenses are recorded on an accrual basis. Expenses for FedDev Ontario'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 respective 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 which 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 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.
Revenues
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 FedDev Ontario'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 Agency's gross revenues.
4. Parliamentary Authorities
FedDev Ontario is financed by the Government of Canada through parliamentary authorities. Financial reporting of parliamentary authorities provided to FedDev Ontario do not parallel financial reporting according to generally accepted accounting principles, since parliamentary 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, FedDev Ontario 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, and (b) Authorities requested.
a) Reconciliation of net cost of operations to requested authorities (in thousands of dollars)
| Estimated 2015-16 |
Planned 2016-17 |
|
|---|---|---|
| Net cost of operations | $128,473 | $189,510 |
| Adjustment for items affecting net cost of operations but not affecting authorities: |
||
| Amortization of tangible capitals assets | (47) | (38) |
| Gain (loss) on disposal of tangible capital assets | 0 | 15 |
| Services provided without charge by other government departments | (3,971) | (3,992) |
| Increase in vacation pay and compensatory leave | 171 | 86 |
| Increase (decrease) in employee future benefits | 12 | 0 |
| Bad debt expense | (4,535) | (3,656) |
| Refunds of previous years' expenditures | 916 | 655 |
| Total items affecting net cost of operations but not affecting authorities | (7,454) | (6,930) |
| Adjustment for items not affecting net cost of operations but affecting authorities: |
||
| Acquisition of tangible assets | 0 | 60 |
| Proceeds from disposal of tangible capital assets | 0 | 15 |
| Loans issued on behalf of Government | 77,818 | 51,793 |
| Total items not affecting net cost of operations but affecting authorities | 77,818 | 51,868 |
| Requested authorities | $198,837 | $234,448 |
b) Authorities requested (in thousands of dollars)
| Estimated 2015-16 |
Planned 2016-17 |
|
|---|---|---|
| Authorities requested: | ||
| Vote 1 – Operating expenditures | $27,131 | $25,754 |
| Vote 5 – Grants and contributions | 183,325 | 205,480 |
| Statutory amounts | 3,153 | 3,214 |
| Less: | ||
| Lapsed: Vote 5 – Grants and contributions | (14,772) | |
| Requested authorities | $198,837 | $234,448 |